Employers Anticipate 14% Cost Increase in Health Insurance in 2004
Large employers anticipate a 14% increase in health insurance costs next year, and they are exploring ways to pass along some of those costs to employees, according to a Hewitt Associates survey of 650 major U.S. companies released Tuesday, the Sacramento Bee reports (Rapaport, Sacramento Bee, 12/3). The companies surveyed said that they can afford to absorb 9% of that increase, the Hartford Courant reports (Levick, Hartford Courant, 12/3). As a result, workers likely will experience higher premiums and payments for prescription drugs, hospital visits, doctor appointments and other services, according to the Bee (Sacramento Bee, 12/3). Jack Bruner, national practice leader for Hewitt's Health Management Practice, said, "This year's survey suggests an increased willingness to explore new options, such as more sophisticated purchasing strategies and consumer choice health plans." According to the survey:
- Next year, employees will pay on average 23% of their individual premiums -- up from 21% this year -- and 27% of premiums to cover dependents -- up from 25% this year.
- More than one-third of employers surveyed currently charge higher premiums to cover dependents than premiums for workers.
- One-quarter of employers offer credits for workers who decline dependent coverage.
- Ten percent of employers require workers to pay more if their spouses decline coverage from their own employers.
- Nine percent of the companies surveyed require workers' spouses to obtain health coverage from their own employers.
- Twelve percent of large employers next year will offer "consumer-driven" health plans, which feature employer-funded accounts that employees can use for certain amount of medical expenses. After the account is exhausted, employees must pay out-of-pocket until another health plan takes effect.
- Thirty-nine percent of employers have "co-insurance" plans, which require employees to pay a percentage of their prescription drug costs instead of a set dollar amount for a copayment.
- Twenty-three percent of employers have "step therapy" programs, which require workers to try cheaper drugs for certain medical conditions before the plan will cover more expensive drugs (Hartford Courant, 12/3).
- Twenty-one percent of employers offer incentives to employees who participate in wellness programs.
- About 75% of employers offer chronic disease management programs (Hall, Detroit News, 12/3).